SES SA FDR (Class A) · EURONEXT:SESG
SES SA FDR (Class A) — SES — Non-Deal Roadshow (March 2020)
38 slides from SES SA FDR (Class A)'s roadshow presentation, March 2020
Slide 1: Investor Presentation March 2020
INVESTOR PRESENTATION March 2020 Investor Presentation | March 2020 SES Proprietary and Confidential
Slide 2: Agenda
Agenda Page Our Purpose & Ambitions 3 SES at a Glance 4 Business & Financial Highlights 5 Market Environment & Strategic Priorities 9 SES Video 11 SES Networks 13 Simplify & Amplify 17 U.S. C-Band 18 FY 2019 Results 21 Key Takeaways 36 Investor Presentation | March 2020 2
Slide 3: We Do the Extraordinary in Space to Deliver Amazing Experiences Everywhere on Earth
WE DO THE EXTRAORDINARY IN SPACE TO DELIVER AMAZING EXPERIENCES EVERYWHERE ON EARTH We believe in content and connectivity everywhere We provide cloud-enabled, satellite-based intelligent connectivity We are future-proof, powered by sustained growth and innovation We are passionate about customer ex
Slide 4: Leader in Global Content Connectivity Solutions
LEADER IN GLOBAL CONTENT CONNECTIVITY SOLUTIONS TAKE YOUR 99% EUR 1.98BN STORY ANYWHERE of the world’s population covered by SES’ network 2019 group revenue 365+ EUR 1.22BN million TV homes served 2019 group At SES, we believe everyone should have the freedom to take their story wherever by SES Vide
Slide 5: Business & Financial Highlights
Business & Financial Highlights SOLID 2019 FINANCIAL AND OPERATIONAL PERFORMANCE Group EBITDA and net debt to EBITDA delivered in line with SES’ financial outlook and consistent with commitment to Investment Grade SES Networks revenue growing in line with expectations. Strong progress made ahead
Slide 6: Solid Financial Performance Driven by Strong Focus on Execution
Solid Financial Performance Driven by Strong Focus on Execution EUR million Financial Outlook 2018 Actual (restated) 2018 Actual (reported) Over 20% underlying growth in Networks business (last 2 years) Video Revenue 1,320 - 1,355 1,324 1,306 Strong focus on cost and Networks Revenue 660 - 690 7
Slide 7: Leverage Development In Line With Investment Grade Commitment
Leverage Development In Line With Investment Grade Commitment Net debt to EBITDA ratio Free cash flow before financing activities of EUR 826.3 million Times(1) representing 41.7% of group revenue 3.40 3.50 3.47 Net debt reduced by 5.8% (YOY) to EUR 3,273 million 3.29 3.22 Net debt to EBITDA ra
Slide 8: Reducing CapEx Intensity While Differentiated Investments Drive Future Growth
Reducing CapEx Intensity While Differentiated Investments Drive Future Growth Capital Expenditure (growth and replacement)(1) EUR million (excluding any impact from C-Band) 854(2) O3b mPOWER and SES-17 572(2) Average of EUR 500 million (2018-2024) 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 20
Slide 9: Strengthening Positioning and Flexibility Within a Rapidly Evolving Market Environment
Strengthening Positioning and Flexibility Within a Rapidly Evolving Market Environment VIDEO: linear broadcast is entrenched and profitable but powerful market NETWORKS: growing demand and increasing competition means clear forces are driving rapid change and the pace is accelerating strategy, scale
Slide 10: Our Strategic Priorities
Our Strategic Priorities SES Video | Moving images that move the world Reinforcing and driving value through our core video neighbourhoods, unparalleled technical reach and delivery of premium/high-quality content Develop OTT and orchestration capabilities to support our content provider custome
Slide 11: Large, Highly Profitable and Resilient Video Business
Large, Highly Profitable and Resilient Video Business 8,300+ 365+ million 40 EUR 3.9 billion 10 YEARS TV channels TV homes DTH platforms contract backlog (2019) typical contract length VIDEO DISTRIBUTION (75% of Video 2019 revenue) VIDEO SERVICES ~15% (25% of Video 2019 revenue) Europe (~50%): leadi
Slide 12: Enhancing Customer Experience and Driving Customer Success Everywhere
Enhancing Customer Experience and Driving Customer Success Everywhere DARING TO BRINGING CONTENT DREAM TO LIFE “EBU entrusted MX1 to take “Not only will customers enjoy a care of the global distribution of crystal-clear picture for sports, the three Eurovision 2019 live shows and movies, but also wi
Slide 13: Expanding Networks Business Is The Growth Engine For SES
Expanding Networks Business Is The Growth Engine For SES +21% Growth Unique GEO-MEO MEF CE 2.0 EUR 2.4 billion 3-5 YEARS in revenue (last 2 years) and terrestrial network telco-grade certification contract backlog (2019) typical contract length MOBILITY (>25% of Networks 2019 revenue) >25% GOVERNMEN
Slide 14: Enhancing Customer Experience and Driving Customer Success Everywhere
Enhancing Customer Experience and Driving Customer Success Everywhere AT HOME AND THE OFFICE EMPOWERING NEXT-GEN CONNECTIVITY IN THE AIR PASSENGER EXPERIENCES “Our agreements with SES secure “MedallionNet has significantly scalable bandwidth necessary for elevated the cruise experience Gogo 2Ku to c
Slide 15: Building the Future with O3b mPOWER
Building the Future with Dramatically scales the industry’s only commercially and operationally proven NGSO Unprecedented flexibility to create differentiated user experiences and commercial models Seamless, intelligent integration with existing terrestrial, MEO and GEO satellite networks Reach and
Slide 16: O3b mPOWER Offering New Opportunities
O3b mPOWER Offering New Opportunities Multi-terabit 5,000+ 400M 100% productive beams go only to customers scalable to 10s of Tbps globally beams per satellite square kilometres covered not empty territory CURRENT MEO NEW OPPORTUNITIES FROM 2021 20 satellites in operation (including spares) plus fou
Slide 17: Positioning SES For Future Growth and Delivering Maximum Value
Positioning SES For Future Growth and Delivering Maximum Value SIMPLIFY AMPLIFY | Next phase of SES’ strategic transformation CREATE PURE-PLAY FOCUS ON SIMPLIFY INNOVATE FOR MARKET VERTICALS CORE STRENGTHS OPERATIONS THE FUTURE Explore creation of two pure-play market verticals Double-down on what w
Slide 18: FCC's Landmark C-Band Decision Delivers Objective of Win-Win-Win Outcome
FCC’s Landmark C-Band Decision Delivers Objective of Win-Win-Win Outcome Clears spectrum quickly Accelerates GDP Protects current TV and Addresses rural U.S. to enable U.S. 5G growth and 5G radio broadcasts to 120 needs for quality TV and leadership innovation million homes broadband C-Band Report
Slide 19: Leader in Global Content Connectivity Solutions
LEADER IN GLOBAL CONTENT CONNECTIVITY SOLUTIONS Solid financial performance with EBITDA and leverage in line with expectations for the second consecutive year Networks delivering on the growth potential and focusing on seamless, cloud-scale intelligent connectivity Sharpening focus on cash gen
Slide 20: FY 2019 Results
SES‘ FY 2019 Results
Slide 21: 2019 Financial Highlights (1/2)
2019 Financial Highlights (1/2) Revenue of EUR 1,983.9 million (-1.3% as reported and -3.8% at constant FX compared with 2018) • Second successive year of growth in SES Networks, underlying(1) up 4.5% YOY and double digit growth in Mobility segment (+16.6%) EBITDA of EUR 1,216.6 million (-3.1% a
Slide 22: 2019 Financial Highlights (2/2)
2019 Financial Highlights (2/2) Net debt to EBITDA ratio of 3.22x, compared with 3.29x at 31 December 2018, including 5.8% net debt reduction • In June 2019, completed renewal of the group’s EUR 1.2 billion Committed Revolving Credit Facility • In October 2019, successfully priced new 8-year EUR 5
Slide 23: Sharpening Focus to Maximise Benefit of Industry-leading Neighbourhoods and Reach
Sharpening Focus to Maximise Benefit of Industry-leading Neighbourhoods and Reach SES Video revenue 2019 Video revenue slightly below financial outlook due to EUR million -8.5% (-7.8% underlying) one important contract that did not close 1,326.0 14.3 1,213.4 3.4 Expanding the reach of SES’ video
Slide 24: Core Neighbourhoods Creating Value Amidst Major Shifts in Media Consumption
Core Neighbourhoods Creating Value Amidst Major Shifts in Media Consumption Video Distribution revenue walk Underlying revenue -7.9% (YOY at constant FX) EUR million • North America decreased primarily due to lower U.S. wholesale 998.7 revenue from single customer and ongoing SD TV switch off (78.
Slide 25: Evolving Services Portfolio to Deliver Enhanced Customer Experience and Value
Evolving Services Portfolio to Deliver Enhanced Customer Experience and Value Video Services revenue walk Underlying revenue -7.2% (YOY at constant FX) EUR million • HD+ lower as business shifts towards software-driven approach 327.3 resulting in lower hardware sales (23.7) n/a 303.6 • Panasonic a
Slide 26: Second Year of Strong Growth Underpinning Networks as the Growth Engine for SES
Second Year of Strong Growth Underpinning Networks as the Growth Engine for SES SES Networks revenue 2019 Networks revenue in line with financial outlook EUR million +4.7% (+4.5% underlying) • 21% absolute growth in underlying revenue in the last 2 years 762.0 27.9 727.6 25.2 Re-defining connect
Slide 27: Expanding Both U.S. and Global Government Services
Expanding Both U.S. and Global Government Services Government revenue walk Underlying revenue +4.9% (YOY at constant FX) EUR million +13.5 • Growing U.S. Government revenue with new and expanded MEO- enabled network solutions in addition to GEO projects (5.2) 294.6 286.3 • Global Government portfo
Slide 28: Building Commercial Pipeline to Support Telco, MNO and Cloud Network Extension
Building Commercial Pipeline to Support Telco, MNO and Cloud Network Extension Fixed Data revenue walk Underlying revenue -4.2% (YOY at constant FX) EUR million • YOY comparison impacted by exceptionally strong Q4 2018 +2.2 267.9 (10.5) 259.6 • Lower revenue from wholesale capacity contracts in Eu
Slide 29: Double-digit Growth in Aero and Maritime Driving Another Strong Year For Mobility
Double-digit Growth in Aero and Maritime Driving Another Strong Year For Mobility Mobility revenue walk Underlying revenue +16.6% (YOY at constant FX) EUR million • Strong growth in Aero reflected the continuing expansion of +28.7 solutions supporting service provider partners to meet connectivity
Slide 30: Revenue Driven By Second Successive Year of Networks With Reduction in Video
Revenue Driven By Second Successive Year of Networks With Reduction in Video Revenue walk EUR million 51.8 Group revenue of EUR 1,983.9 million down 1.3% as reported (-3.8% YOY at constant FX) Second successive year of underlying(1) Networks growth (+4.5%), offset by lower underlying(1) Video (-
Slide 31: EBITDA Development Reflects Strong Focus on Discretionary Spending
EBITDA Development Reflects Strong Focus on Discretionary Spending EBITDA walk EUR million 31.3 EBITDA EBITDA EBITDA EBITDA EBITDA margin margin Margin margin margin 63.1% 62.5% 63.0% 61.3% 62.4% Operating expenses 2.3% lower than 2018 (at constant FX) reflecting strong control over cost and discr
Slide 32: Net Profit of EUR 296.2 million Representing an Increase of 1.3%
Net Profit of EUR 296.2 million Representing an Increase of 1.3% EUR million 2018 2019 EBITDA 1,255.5 1,216.6 - EBITDA margin 62.5% 61.3% Includes EUR 96.8 million impairment expenses mainly relating to MX1 and Depreciation & Amortisation(1) (864.4) (851.2) reflecting SES’ more prudent financial out
Slide 33: Strong Cash Generation Profile
Strong Cash Generation Profile EUR million 2018 2019 Net cash generated by operating activities 1,191.3 1,134.1 - Cash conversion ratio(1) 94.9% 93.2% Net cash absorbed by investing activities (320.8) (307.8) Free Cash Flow (FCF) Before Financing Activities 870.5 826.3 - FCF before financing as a %
Slide 34: Leverage Development In Line With Investment Grade Commitment
Leverage Development In Line With Investment Grade Commitment Net debt to EBITDA ratio Times(1) 3.41 3.53 3.43 3.50 3.47 3.29 3.40 3.22 Q1 2018 Q2 2018 Q3 2018 Q4 2018 Q1 2019 Q2 2019 Q3 2019 Q4 2019 Net debt reduced by 5.8% (YOY) to EUR 3,273 million representing net debt to EBITDA ratio of 3.22
Slide 35: FY 2020 Financial Outlook
FY 2020 Financial Outlook Financial outlook assumes EUR/USD FX rate of EUR 1 = USD 1.15, nominal launch schedule and satellite health status Between EUR 1,920 million and EUR 2,000 million(1) Revenue ▲ Video between EUR 1,110 million and EUR 1,150 million ▲ Networks between EUR 800 million and EUR 8
Slide 36: Leader in Global Content Connectivity Solutions
LEADER IN GLOBAL CONTENT CONNECTIVITY SOLUTIONS Solid financial performance with EBITDA and leverage in line with expectations for the second consecutive year Networks delivering on the growth potential and focusing on seamless, cloud-scale intelligent connectivity Sharpening focus on cash gen
Slide 37: Disclaimer
Disclaimer This presentation does not, in any jurisdiction, including without limitation in the U.S., constitute or form part of, and should not be construed as, any offer for sale of, or solicitation of any offer to buy, or any investment advice in connection with, any securities of SES, nor should
Slide 38: Investor Relations Contacts
Richard Whiteing Anja Siehler Jalal Dahmane Michelle Suc Investor Relations Investor Relations Investor Relations Investor Relations [email protected] [email protected] [email protected] [email protected] T +352 710 725 261 T +352 710 725 8279 T +352 710 725 325 T +352 710 725 403 M